National Debt Under Obama How Much Did Obama

Quote:

National Debt Under Obama

How Much Did Obama Really Add to the Nation's Debt?


http://useconomy.about.com/od/usdebtanddefici...-Obama.htm

By Kimberly Amadeo

Updated February 06, 2016.

Depending on who you talk to, President Obama added anywhere from $983 billion to $7.7 trillion to the U.S. debt. Who's lying? None of them. That's because there are three ways to look at the debt added for any President.

The first, and most common, method is to subtract simply the debt level when he took office from the current debt. The second, and more accurate, method is to add together his projected budget deficits.

The third method is the fairest, but is also the most complicated.

That only adds to the deficits created by the President's specific initiatives. Fortunately, the Congressional Budget Office has done this for you.

Review these three methods below, and you'll be able to win any argument made about how much President Obama has added to the national debt.

Method 1. Debt Added Since Obama Took Office

The first, and largest, is how much debt has been added since Obama took office. On January 20, 2009, when he was sworn in, the debt was $10.626 trillion. Today it's slightly more than $18 trillion.
That's why most people say Obama added a little more than $8 trillion to the debt, more than any other President. And he still has two more years in office! For more, see Why Is the U.S. Debt So Large?

Method 2. Obama's Budget Deficits

However, it's a little misleading to hold Obama (or any other President) accountable for the deficit incurred during his first year of office. That's because the federal budget for that fiscal year was already set by the prior Administration.

President Bush's last budget (FY 2009) created a deficit of $1.16 trillion, even without the spending on the Economic Stimulus Act. Most of this addition to the debt occurred after the new President took office, and so should not be attributed to Obama.

• FY 2009 - Although this was President Bush's last budget, it was implemented during Obama's first year. Congress agreed to add the first year's worth of spending from the Economic Stimulus Act to this. That $253 billion accrues to Obama.

• FY 2010 - Obama's first budget created a $1.293 trillion deficit.
• FY 2011 - It contributed $1.299 trillion to the debt.
• FY 2012 - The deficit was the largest in history, at $1.327 trillion.
• FY 2013 - This was the first Obama budget where the deficit, $901 billion, was less than $1 trillion.
• FY 2014 - The deficit projection in the budget was $744 billion.
• Current Budget - The deficit is projected to be $564 billion.
When the deficits from all these budgets are added together, President Obama increased the debt by $5.073 trillion.

3. How Obama's Policies Increased the Debt

However, there were some other events that Obama faced, just like every President, over which he had no control. There was less Federal income, thanks to decreased tax receipts during the recession and to the Bush tax cuts.

At the same time, the cost of Social Security, Medicare and other mandatory spending continued to increase. The War on Terror, although technically over, was still being fought in Afghanistan and Iraq.

The third, and smallest, method is how much debt was added thanks to Obama's specific policies. The largest contribution was the Obama tax cuts, which were an extension of the Bush tax cuts. These added $858 billion to the debt in 2011 and 2012.

The next largest was the ARRA, which added $787 billion between 2009-2012. It cut taxes, extended unemployment benefits, and funded job-creating public works projects. Both were attempts to stimulate the economy after the 2008 financial crisis.

Also, Obama increased military spending to around $800 billion a year, on average. In fact, his security budget request of $895 billion in FY 2011 set a new record. Even though troops were withdrawn from Iraq in 2012, and Osama bin Laden was eliminated in

2011, Obama requested $851 billion for security spending in his FY 2013 budget. That was more than in his first year in office. Although Obama abandoned the phrase "War on Terror," he spent $602 billion -- almost as much as the $850 billion Bush spent in eight years.

What about the Patient Protection and Affordable Care Act? It didn't add anything to the debt in Obama's first term. That's because most of its costs occurred starting in 2014, after the health insurance exchanges were set up, and coverage was extended to more low-income people. In fact, tax increases will offset costs to the tune of $104 billion between 2010-2019.

For more, see Obamacare Costs.

Congress and Obama also negotiated the sequestration budget cuts. When these were subtracted from these costs, Obama's debt contribution was $983 billion between 2009-2017. (Source: WSJ, Ezra Klein, Doing the Math on Obama's Deficits, January 31, 2014)


Article updated February 6, 2016.

Deficit by President

What Budget Deficits Don't Tell You About the Debt
Updated February 06, 2016.


There's a lot of argument over which President ran the highest deficits, and contributed the most to the national debt. It's not as easy as you might think to determine how much deficit each President created. The easy way is to look at the deficit by year for the length of their terms.

However, the President isn't responsible for the budget deficit that accrues for his first calendar year in office (January through December).

That's because the federal budget for January through September 30 of that year was already set by the prior President. The Federal government's fiscal year runs from October 1 through September 30.
Here's an example of how it works.

President Bush submitted the FY 2009 budget to Congress in February 2008. Congress approved it, and it took effect October 1 2008. President Obama was elected in November 2008, and started office in January 2009. He had to live with President Bush's budget until his budget was approved and took effect October 1 2009.
This is also a rare example of how a President can add to the previous budget.


Right after President Obama took office, the Dow dropped to 6,594.44 and sparked fears of the recession worsening. Obama got Congressional approval to pass the Economic Stimulus Act.

Congress authorized another $253 billion to be spent immediately, adding that amount to Bush's FY 2009 budget.

The Best Way to Measure Deficit by President

Therefore, the most accurate way to measure the deficit by President is to sum all the budget deficits actually created in his budgets.
That's because the budget puts the President's priorities into black and white. It measures the impact of deficit spending and tax changes in dollars and cents.

There are a few caveats, however. First, Congress does have an important role, since it must approve the budget. Each house of Congress prepares its own budget, and negotiates with the Executive Office to complete a budget each year. For more, see Who's Who in the Budget Process.

Second, each President inherits a lot of his predecessors' policies.

For example, every President has had to compensate for lower revenue thanks to President Reagan's and President Bush's tax cuts.
Presidents who raise taxes become very unpopular very quickly.
Third, while every President has had to deal with a recession, all recessions were not created equal.

Furthermore, some Presidents have had to deal with unusual events, like the 9/11 terrorist attack and Hurricane Katrina. While these weren't part of the business cycle, they required responses that came with economic price tags.

Fourth, the deficit created by the Mandatory portion of the budget isn't created by the President.

That's because the Mandatory budget is simply an estimate of what these programs will cost. They've already been approved by the Act of Congress that created the program. Unless the President can get Congress to remove or modify the program, he's got to live with that spending. The Mandatory budget includes Social Security, Medicare, and Medicaid, as well as TARP and the Affordable Care Act. Social Security and Medicare are usually the two biggest expenses any President has.

You probably know that each year's deficit is added to the debt. However, did you also know that the amount added to the debt each year is more than the deficit?

That's because Presidents can "borrow" from the Social Security Trust Fund, and other parts of the government that are running a surplus. Find out How Much Each President Really Contributed to the Debt.

President Barack Obama

President Obama has the largest deficits, totaling $6.6 trillion projected for his eight years in office. Obama started off launching the $787 billion economic stimulus package that cut taxes, extended unemployment benefits, and funded job-creating public works projects.

The Obama tax cut added $858 billion to the debt in its first two years. Most important was increased defense spending, which added as much as $800 billion a year. Federal income decreased due to lower tax receipts from the 2008 financial crisis.

Both Presidents Bush and Obama had to contend with higher mandatory spending for Social Security and Medicare than their predecessors did. That's because health care costs were rising, and the American population was aging. In 2010, Obama launched the Patient Protection and Affordable Care Act to reduce the debt by $143 billion by 2020. For more, see National Debt Under Obama.

President George W. Bush

President Bush is next, racking up $3.294 trillion over two terms. He responded to the attacks on 9/11 with the War on Terror, driving total military spending to at least $600 billion a year. The Bush tax cuts, also known as EGTRRA and JGTRRA, cut taxes to address the 2001 recession. Unfortunately, the cuts did not sunset when the recession was over, adding to the housing boom and depleting revenues during the 2008 recession.


President Ronald Reagan

President Reagan added $1.412 trillion in deficits during his two terms. He fought the 1982 recession by cutting the top income tax rate from 70% to 28%, and the corporate rate from 48% to 34%. He also increased government spending by 2.5% a year. This included a 35% increase in the defense budget, and an expansion of Medicare.

Although $1.412 trillion doesn't sound like a lot, compared to 2012 debt levels, in fact Reagan's economic policies nearly doubled the debt during his Presidency.

President George H.W. Bush

President George H.W. Bush racked up a $1.03 trillion deficit in one term. He responded to Iraq's invasion of Kuwait with Desert Storm. He oversaw the $125 billion bailout to end the 1989 Savings and Loan crisis. Part of his deficit was due to lost tax revenue from the 1991 recession.

Although most other Presidents ran deficits, none comes close to these four. Part of that is because the U.S. economy, as measured by GDP, was so much smaller for other Presidents. For example, in 1981 GDP was only $3 trillion, growing by five times to $15 trillion in 2012.

See the table below for a year-by-year detail of each President's budget deficit since President Woodrow Wilson. Also see Deficit by Year, Debt by President and Debt by Year. Updated February 6, 2016.

Budget Deficits by Fiscal Year

President Barack Obama: Total Projected Plus Actual Deficits = $6.619 trillion.
• FY 2017 - $463 billion projected.
• FY 2016 - $474 billion projected.
• FY 2015 - $583 billion projected.
• FY 2014 - $485 billion.
• FY 2013 - $680 billion.
• FY 2012 - $1.087 trillion.
• FY 2011 - $1.300 trillion.
• FY 2010 - $1.547 ($1.294 trillion plus $253 billion from the Obama Stimulus Act that was attached to the FY 2009 budget).

President George W. Bush: Total = $3.294 trillion.

• FY 2009 - $1.16 trillion. ($1.416 trillion minus $253 billion from Obama's Stimulus Act)
• FY 2008 - $458 billion.
• FY 2007 - $161 billion.
• FY 2006 - $248 billion.
• FY 2005 - $318 billion.
• FY 2004 - $413 billion.
• FY 2003 - $378 billion.
• FY 2002 - $158 billion.

President Bill Clinton: Total = $63 billion surplus.
• FY 2001 - $128 billion surplus.
• FY 2000 - $236 billion surplus.
• FY 1999 - $126 billion surplus.
• FY 1998 - $69 billion surplus.
• FY 1997 - $22 billion.
• FY 1996 - $107 billion.
• FY 1995 - $164 billion.
• FY 1994 - $203 billion.

President George H.W. Bush: Total = $1.03 trillion.
• FY 1993 - $255 billion.
• FY 1992 - $290 billion.
• FY 1991 - $269 billion.
• FY 1990 - $221 billion.

President Ronald Reagan: Total = $1.412 trillion.
• FY 1989 - $153 billion.
• FY 1988 - $155 billion.
• FY 1987 - $150 billion.
• FY 1986 - $221 billion.
• FY 1985 - $212 billion.
• FY 1984 - $185 billion.
• FY 1983 - $208 billion.
• FY 1982 - $128 billion.

President Jimmy Carter: Total = $253 billion
• FY 1981 - $79 billion.
• FY 1980 - $74 billion.
• FY 1979 - $41 billion.
• FY 1978 - $59 billion.

President Gerald Ford: Total = $181 billion.
• FY 1977 - $54 billion.
• FY 1976 - $74 billion.
• FY 1975 - $53 billion.

President Richard Nixon: Total = $70 billion.
• FY 1974 - $6 billion.
• FY 1973 - $15 billion.
• FY 1972 - $23 billion.
• FY 1971 - $23 billion.
• FY 1970 - $3 billion.

President Lyndon B. Johnson: Total = $42 billion.
• FY 1969 - $3 billion surplus.
• FY 1968 - $25 billion.
• FY 1967 - $9 billion.
• FY 1966 - $4 billion.
• FY 1965 - $1 billion.
• FY 1964 - $6 billion.

President John F. Kennedy: Total = $11 billion.
• FY 1963 - $5 billion.
• FY 1962 - $7 billion.

President Dwight Eisenhower: Total = $16 billion.
• FY 1961 - $3 billion.
• FY 1960 - $0 billion (slight surplus).
• FY 1959 - $13 billion.
• FY 1958 - $3 billion.
• FY 1957 - $3 billion surplus.
• FY 1956 - $4 billion surplus.
• FY 1955 - $3 billion.
• FY 1954 - $1 billion.

President Harry Truman: Total = $3 billion.
• FY 1953 - $6 billion.
• FY 1952 - $1 billion.
• FY 1951 - $6 billion surplus.
• FY 1950 - $3 billion.
• FY 1949 - $1 billion surplus.
• FY 1948 - $12 billion surplus.
• FY 1947 - $4 billion surplus.
• FY 1946 - $16 billion.

President Franklin D. Roosevelt: Total = $196 billion.
• FY 1945 - $48 billion.
• FY 1944 - $48 billion.
• FY 1943 - $55 billion.
• FY 1942 - $21 billion.
• FY 1941 - $5 billion.
• FY 1940 - $3 billion.
• FY 1939 - $3 billion.
• FY 1938 - $0 billion (slight deficit).
• FY 1937 - $2 billion.
• FY 1936 - $4 billion.
• FY 1935 - $3 billion.
• FY 1934 - $4 billion.

President Herbert Hoover: Total = $5 billion.
• FY 1933 - $3 billion.
• FY 1932 - $3 billion.
• FY 1931 - $0 billion (slight deficit).
• FY 1930 - $1 billion surplus.

President Calvin Coolidge: Total = $6 billion surplus.
• FY 1929 - $1 billion surplus.
• FY 1928 - $1 billion surplus.
• FY 1927 - $1 billion surplus.
• FY 1926 - $1 billion surplus.
• FY 1925 - $1 billion surplus.
• FY 1924 - $1 billion surplus.

President Warren G. Harding: Total = $2 billion surplus.
• FY 1923 - $1 billion surplus.
• FY 1922 - $1 billion surplus.

President Woodrow Wilson: Total = $22 billion.
• FY 1921 - $1 billion surplus.
• FY 1920 - $0 billion (slight surplus).
• FY 1919 - $13 billion.
• FY 1918 - $9 billion.
• FY 1917 - $1 billion.
• FY 1916 - $0 billion (slight surplus).
• FY 1915 - $0 billion (slight surplus).
• FY 1914 - $0 billion.
FY 1789 - FY 1913 - $24 billion surplus. (Source: OMB, Table 1.1—Summary of Receipts, Outlays, and Surpluses or Deficits: 1789–2017)